Timor-Leste's president has sharply criticised exploitation in Australia's Pacific labour scheme, warning that unscrupulous employers are soaking workers from his country by over-charging them for accommodation and transport.

Jose Ramos-Horta made the critique during a wide-ranging speech at the National Press Club, where he also conceded he was using the prospect of Chinese companies backing his country's ambitious plan to develop the Greater Sunrise oil and gas fields as "leverage" during complex negotiations with energy companies.

The federal government has brought thousands of workers from the Pacific to Australia to work in sectors gripped by labour shortages, yielding an invaluable source of income to Pacific families and governments.

But unions and advocacy groups have long complained that the PALM scheme has been open to exploitation, while last month the ABC's 730 exposed how a growing number of PALM workers have been left destitute and homeless after absconding from their workplaces.

Exploitation of workers

The president told Press Club that he was aware of some Timorese workers who were being charged excessively high rent just for a bed in an eight-bunk dormitory provided by their bosses.

"A dormitory for eight people with bunks, turns out to cost a week $700 — it's more expensive than Tokyo, so exploitative," he said.

"And they have to pay for the bus transportation too."

He also suggested some of these mandatory expenses were soaking up too much of the money that workers wanted to send back home to their families, saying that terms for overseas workers were much more generous in other countries.

"Three thousand, eight hundred Timorese workers spend $90 million on annual living expenses in Australia … we need that (money)" he told the Press Club.

 

"This program helps us, helps our economy, but it has to change. It's unfair. That is exploitative."

The president said Timor-Leste's embassy had compiled "substantive" reports of unscrupulous behaviour and that he "hoped that it will be corrected" because Australia was a "fair-minded country."

"And so I believe that, in due time, or due course, it will change, it will improve."

In response, a Department of Employment and Workplace Relations spokesperson told the ABC that the welfare of PALM workers was "of central importance to the Australian government and its Pacific and Timor-Leste partners."

"Exploitation of workers is not tolerated, and addressing risks of exploitation is central to new PALM scheme settings and program delivery," they said.

"PALM scheme employers are required to source accommodation for PALM scheme workers that is representative of actual costs and comparable to local market rates.

"PALM scheme employers are also required to arrange transport for workers that is affordable, comfortable and safe. The overwhelming majority of PALM scheme employers engage with the scheme responsibly."

Ryan Edwards from the Australian National University said he hadn't seen any evidence that most PALM workers paid comparatively high rent.

"90 per cent of the 2,000 workers surveyed there say they're satisfied with their accommodation arrangements too, which doesn't seem too bad given the housing crisis," he told the ABC.

"At the same time, issues with these deductions in general are the most common area of complaint."

Mr Edwards stressed that under PALM rules workers can't be forced into making salary deductions for transport or accommodation expenses. But he said many of the workers might not realise this.

"I do not think it is especially well understood but understand why risk-averse employers and government agencies might not be encouraging this given the high levels of scrutiny and welfare standards expected of the scheme," he said.

"Workers need to be full informed and have realistic expectations about housing, transport, and other costs, their earnings, and the deduction and repayment mechanisms in the first place.

"They should also be aware of and exercise their options to manage these deductions and expenses themselves, noting the policy documents around the scheme are strong on employers not coercing workers into doing things themselves."

Timor Sea gas project

Mr Ramos-Horta also fielded questions about the ongoing negotiations between Timor's state-owned oil and gas company, Woodside Energy and Osaka Gas over the future of the Greater Sunrise fields between Australia and Timor-Leste.

Timor-Leste's government has insisted that the gas must be piped north so it can be processed at a new facility it wants to build on the country's southern coast, but there have long been question marks over the technical and financial viability of that plan.

Woodside has previously indicated it would rather pipe the gas south to Darwin for processing, while the federal government has appointed former Victorian premier Steve Bracks as a special envoy to help hammer out a deal.

Mr Ramos-Horta has repeatedly said that companies from China and a host of other countries — including South Korea and Kuwait — are interested in funding a pipeline to Timor-Leste if the consortium cannot reach an agreement.

When asked if he was playing the China card in order to get the Australian government to lean heavily on Woodside or offer other guarantees to get the pipeline to Timor-Leste built, Mr Ramos Horta said his country was simply making it clear it had plenty of options to develop Greater Sunrise.

"Leveraging on the Greater Sunrise, yeah, of course, you call it leverage, but we say we look for partners," he said.

"You know, if Australia doesn't feel like it, we can totally understand it but then either we talk with the Chinese or the Kuwaitis."

After his speech, the president told AAP that the Chinese oil and gas giant Sinopec had specifically expressed interest in the project.

"The Chinese are interested … and they have the means, the experience, the expertise," he said.

Timor-Leste has also suspended delivery of an Australian-built Guardian-class patrol vessel, which was meant to be gifted to the country earlier this year.

Some analysts have said Dili made that move to send a warning signal to Australia that the close strategic and security ties between the two countries might be contingent on Canberra intensifying its efforts to help a deal that meets Dili's expectations.

When asked about that theory, Mr Ramos Horta called it "speculation" but also said it "could be accurate", while stressing he was "not warned by our government" about the decision on the patrol vessel.

But he subsequently said he didn't believe the decision was linked to the Greater Sunrise negotiations, saying Timor-Leste's government had delayed or suspended multiple other projects around the same time.